Not quite three months ago, I started looking into figuring out how much interest we earn on our Steem Power. I drew some data from a whale's account, did some back of the napkin calculations, and posted that
...the annual interest rate is maybe a bit over 1%?
A bit vague, but better than nothing.
Then did some more hunting, and still couldn't come up with any solid numbers.
Two months ago, I did some more analysis and crunched numbers. Then wrote a post describing what I found and how I found it. Rather detailed and worth a look-see as it shows how I came up with two different plausible-sounding end results:
Yes, you DO earn interest on Steem Power. All (well, most) is revealed.
I wasn't really satisfied because the math in both cases seemed solid, but the two answers I came up with (1.395% and 1.946%) were further apart than I thought they should be. Basically threw up my hands when I said
I'd love it if someone geekier than me could come up with a more definitive answer, but at least we've come up with a ballpark figure, more that 1% but less than 2% APR.
Well, nobody geekier responded. The disparity between the two numbers bugged me, but I didn't see a way to come up with a more definitive answer. That did not sit well with the geek within. But I saw no way to pound the round peg into a square hole.
Two days ago, I read a post by @flauwy about the many reasons to acquire and hold Steem Power (do go read and upvote the post). @flauwy and I discussed Steem Power interest in the comments section, and I went back and read my earlier post about it.
Then the penny dropped.
Between the ninth and tenth paragraphs, I had conflated Steem and Steem Power. If the current Steem inflation rate was ballparkish 9.3% and Steem Power holders earned 15% of that, I reasoned that that I could just multiply the two and I'd get the interest rate, 1.395%
Big fat mistake there. Did you see it?
Neither did I, then. But I guess it's been bouncing around in my subconscious.
I have come to realize that 1.39X% (constantly slowly dropping as my early post showed), would be the actual rate, if all Steem was held as Steem Power.
But that's not the case. People here hold Steem tokens in their wallets. A bunch of Steem is also held by investors and speculators on various exchanges. But none of that earns interest; only Steem Power earns interest. So while the nominal rate of interest (which is constantly falling) may be about 1.39%, the effective rate is a bit higher. Coinmarketcap.com shows that there are a bit over 240 million Steem in existence. But steemwhales.com shows that there is a bit over 179 million of that held in the form of Steem Power. The SP is eligible to earn interest, the 61 million Steem held as tokens is not. So although circa 1.39% is the nominal rate of interest, circa 1.9% is the effective rate of interest.
Geeky side note: although the nominal rate is constantly falling, the effective rate is instead merely trending lower parallel to it, and can actually briefly rise, at times for instance when, coincidentally, a bunch of whales are powering down simultaneously.
I've rechecked the numbers for the whale account of @freedom and for the biggest holder of SP, the corporate @steemit account.
As of today, your Steem Power earns slightly over 1.9% interest. Unless the ratio of liquid Steem to Steem Power changes significantly, I'd project that, a year from now, your Steem Power will be earning slightly less than 1.8% interest.
Disclaimer: This should not be construed as financial advice. I am not a registered financial advisor; I don't even play on on TV. Do your own due diligence. Batteries not included. Objects may be larger than they appear in mirror. Some assembly required. Do not taunt Happy Fun Ball.
BTC = 1P535cxV1SXkPWj1GAqxv6PqHuaCBnsqJ2
LTC = LSQNA1bCUDXKBfN5bewzBngTczxDBxCQkL
ETH = 0xB86A902A1bedF3b47b20edB5f35218k7d1k91